American History 1988
Chapter 310 - 300: Carpet Bombing

Chapter 310: Chapter 300: Carpet Bombing

"Carpet bombing?" This term made Steve and Jane feel both novel and unfamiliar.

It was novel because the name revealed the marketing principle, but unfamiliar when it came to internet services.

Steve Case and Jane Brandt could not imagine how to conduct such marketing tactics in the field of internet service.

"Dean, what should AOL’s carpet bombing look like?" Steve, who had studied the market for many years, had never considered this method before.

"It’s simple," Dean summed up in one sentence, "stuff every scene in people’s lives with AOL’s advertisements."

Steve was taken aback, "TV commercials, newspapers?"

"Or posters, mailboxes?" Operations Director Jane Brandt added.

Dean glanced at the Operations Director, then nodded.

"You’re getting close, but it’s not direct enough."

In order to describe his method more vividly, Dean casually picked up a magazine from the desk.

"This is a PC World magazine, right?"

"Of course," the two nodded.

"So who would subscribe to this kind of magazine?" Dean asked with a piercing look.

"Of course, people who are interested in computers..." Steve blurted out.

But he quickly caught on, and his voice faded away.

"Do you understand now?" Dean smiled and shook the magazine in his hand, "People who buy this magazine, most of them have computers at home.

Do you still remember from our previous analysis who AOL’s target customers are? Those households that own computers."

"So we saturate magazines with ads?" Jane Brandt frowned slightly.

"No, what we’re going to do is a physical advertisement bombardment!" Dean shook his head, dismissing her guess.

Without waiting for them to ask questions, Dean took out a floppy disk and pressed it against the magazine he held.

"AOL will include a floppy disk with the AOL client installed with every computer-related magazine.

Remember, it’s every magazine related to computers, and that’s not just PC World or PC Techniques.

At the same time, the installation process must be simple enough, ideally ’plug and play’.

The crucial point is that the client floppy disks given out have a free trial period already set up.

Thirty minutes or twenty minutes, that’s for you to decide.

By the same logic, we could even mail these floppy disks directly into people’s mailboxes, just like newspapers."

Dean’s carpet bombing theory left Steve and the others utterly astonished.

"This..." Steve muttered to himself, "Can this work?"

They had seen ground-promotion ads before, but no one had tried them in the field of internet services.

"Why wouldn’t it work?" Dean retorted, "As long as the users are willing to insert our floppy disk into their computer, we have succeeded at that moment."

In the early days of the internet, people’s online life was actually quite monotonous and boring.

After all, there were only a few hundred websites in the world at that time, many of which were experimental sites set up by tech geeks.

Real content-filled websites that were also maintained probably didn’t even number a hundred.

So what did America’s millions of internet users look at when they went online?

The answer lies in ISPs like AOL that provide various content services; their client software already integrated all these services.

Besides the most common activities like reading the news, sending emails, and chatting online.

Online gaming, e-learning and online shopping are all functions that can be fully experienced on the AOL platform.

Even for many first-time users of AOL, its client software represents a microcosm of the internet.

This is a one-stop hypermarket similar to Walmart or Carrefour—choosing AOL means a convenient internet experience that won’t be dull.

Especially for those not versed in computer technology, the rich content and ’ready-to-use’ AOL indeed brings them an unprecedented sense of security.

So just getting AOL’s client into people’s hands and having them open it for a moment makes it impossible for anyone to resist the charm of the internet.

This is the essence of carpet bombing; when you have utmost confidence in your product, it proves to be the most effective and direct marketing approach.

"But that means high costs in publicity and distribution," Steve Case had understood Dean’s plan by now.

However, distributing such a large number of floppy disks wasn’t as simple as placing an ad in a newspaper.

Each floppy disk costs money, plus the cost of packaging the software and collaborating with the magazines.

"In that case," Dean thought of a compromise, "let’s first distribute a batch of 200,000 floppy disks.

If the probability that users try out the service and eventually choose to pay is over 10%, then we’ll implement a more thorough carpet bombing strategy."

percent? Steve Case and Brandt both tacitly started doing the math in their heads.

AOL’s internet service is charged by the minute. If 20,000 people respond,

even if it’s just a two-hour billing period per person in the end, they’d be able to recover the initial ad expenditure.

But according to AOL’s statistics, most users hardly ever turn the service off once they start using it.

The billing hours these users contribute are far more than just two hours; it might be half an hour every day for an entire year.

So a 10% response rate was already astonishing, and AOL’s final profits must have far exceeded this modest investment in advertising.

"OK, let’s start with the first experiment," Steve finally took Dean’s advice.

But he didn’t forget to instruct his operations director, "Jane, cut costs as much as possible, we need precise statistical results."

"No problem, I know what to do," this was Jane Brandt’s forte.

"By the way, Dean, what did you mean by a more thorough carpet bombing just now?"

Wasn’t this method of mailing floppy disks directly to target customers thorough enough?

Dean smiled slightly, "If it’s just magazines and mailboxes, that’s not really carpet bombing.

Let’s wait for the results of these two weeks, I’ll be in Washington in the meantime."

It was the end of July. Dean planned to stay until August or September before returning to the West Coast.

It was the perfect time for him to spend with Miranda and Little Roy, and meanwhile, here at AOL, the floppy disk operation was beginning to take shape.

Under Jane Brandt’s orchestration, the first batch of 3.5-inch floppy disks loaded with the AOL client began to be dispatched.

There were even more than 200,000 units, and including the hardware costs and the advertising fees for the magazines, the cost per disk was about 1.19 US dollars.

This cost wasn’t high, considering the price of a blank disk was a few tens of cents.

Jane Brandt’s bulk purchases lowered their unit price, and in the end, AOL’s total expenditure was around 250,000 US dollars.

These disks started to densely appear on magazine covers, newspaper inserts, and people’s mailboxes.

Two weeks later, according to the data feedback from AOL, the user response rate was 13%!

This was even higher than Dean’s optimistic estimate, leaving Steve Case and Jane Brandt nothing short of astounded.

If every 200,000 disks could bring AOL 26,000 users, then what was there to hesitate about?

The 250,000 advertising expense was simply trivial compared to the revenue those users would eventually contribute.

Thus, after urgently calling Dean, AOL prepared to start a new round of floppy disk distribution.

At this meeting, Dean imparted the entire secret of carpet bombing to AOL, and of course, Steve Case also agreed to some of his terms.

For example, featuring Price’s List on the homepage of the recommended channels in the latest version of the AOL client.

This was the first time AOL included an external website, clearly, Dean’s marketing secrets weren’t free.

As for the effect? Just take a look at the daily life of people here on the East Coast.

Besides the previous magazines, newspapers, and mailboxes, AOL’s floppy disks began to make a comprehensive appearance.

Breakfast cereal boxes people opened in the morning, the airplane meals they received during flights.

The seats at the Super Bowl before the game started, even inside the packaging of frozen steaks.

These everyday details that were closely related to the lives of American citizens almost always featured AOL’s logo on a 3.5-inch floppy disk!

"Insert the tool disk into your PC, and come try the real ’America Online’!"

For a time, this slogan appeared in almost every corner of Virginia.

What is carpet bombing? This is the real carpet bombing!

According to Dean’s initial expectations for Steve Case and his team, AOL’s users were to surpass one million by the end of the year.

This number was to at least double or triple the following year, and then AOL would completely overtake the competition to become the largest network operator in North America.

This goal wasn’t aggressive, because according to the CIX Alliance statistics, the number of internet users in America had already surpassed 8 million.

It shouldn’t be difficult for AOL to seize 20% of the market.

Even more so, as the internet became more widespread and AOL seized the initiative, its customer growth was likely to show an explosive upward trend.

Moreover, Dean also suggested they consider using CDs to replace floppy disks.

After all, the cost of a CD was only about ten cents, a fraction of the cost of a floppy disk.

It was just that not all computers were using the Windows 3.1 system yet, so floppy disks still remained the mainstream for the time being.

Watching AOL’s promotion proceeding with full force, Dean couldn’t help but sigh inwardly.

It was a pity that browser technology hadn’t yet replaced this traditional method of accessing the internet; otherwise, AOL would be the ones with the headache.

Because realistically speaking, even if AOL continually expanded its content domain, it was obviously a different concept from the flourishing "surfing the web."

The browsing experience of clicking on site tags and jumping from page to page was, at best, akin to frolicking with artificial waves in a massage tub.

Then look at the unrestrained browser, a platform where a single click could keep opening up new worlds, the significance of which was self-evident.

It had no restrictions on which web pages you could browse, nor did it confine content within a particular area—it was completely free.

Browser technology was destined to be epoch-making; it opened up the real internet.

After lingering on the East Coast for over two months, Dean finally took his private jet back to the West Coast.

But as soon as he landed, he received numerous complaint calls from his local friends.

Complaints about whom? Complaints about Valentine, whose methods of getting things done were a bit too rough.

<img data-ywcc-imgId="10078366" data-ywcc-path="/imgChapter/22367839109520201/28248071307250904/10078366/004b53f99c07bf39dddcccf08f9fdac8GgI5H1PVcyO11NA.jpg">

(An early AOL client, where online content was all recommended by AOL.)

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